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Is Dominion Resources (D) Poised for a Beat in Q1 Earnings?

Zacks Equity Research

We expect Dominion Resources, Inc. D to beat expectations when it reports first-quarter 2017 results before the market opens on May 4. Last quarter, the electric and natural gas utility delivered a negative earnings surprise of 1.00%.

Why a Likely Positive Surprise?

Our proven model shows that Dominion Resources is likely to beat estimates because it has the right combination of two key ingredients. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to beat estimates and Dominion has the right mix.

Zacks ESP: The company’s Earnings ESP is pegged at +2.15%. This is because the Most Accurate estimate stands at 95 cents, higher than the Zacks Consensus Estimate of 93 cents. This is a meaningful and leading indicator of a likely positive surprise. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Dominion Resources, Inc. Price and EPS Surprise

 

Dominion Resources, Inc. Price and EPS Surprise | Dominion Resources, Inc. Quote

Zacks Rank: Dominion Resources currently carries a Zacks Rank #3. The combination of Dominion’s favorable Zacks Rank and positive ESP makes us reasonably confident of a positive surprise this season.

Conversely, we caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is witnessing negative estimate revisions.

Factors to Consider

In first-quarter 2017, Dominion expects to generate operating earnings of 90 cents to $1.10 per share. In the year-ago quarter, the company reported earnings of 96 cents.

Dominion Resources might continue to incur lower operating expenses at Dominion Generation, which could boost first quarter margins.

However, mild weather in its service territories could have an adverse impact on demand and its bottom line. Millstone production hedging can adversely impact earnings in first quarter.

Other Stocks to Consider

Dominion is not the only company in the Zacks categorized Utility – Electric Power  industry looking up this earnings season. We see likely earnings beats coming from these companies as well.

NiSource Inc. NI has an Earnings ESP of +2.15% and a Zacks Rank #2. It is slated to report first-quarter 2017 earnings on May 3. You can see the complete list of today’s Zacks #1 Rank stocks here.

PPL Corporation PPL has an Earnings ESP of +1.61% and a Zacks Rank #3. It is slated to report first-quarter 2017 earnings on May 4.

Pattern Energy Group Inc. PEGI has an Earnings ESP of + 250% and a Zacks Rank #3. It is slated to report first-quarter 2017 earnings on May 9.

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NiSource, Inc (NI): Free Stock Analysis Report
 
Dominion Resources, Inc. (D): Free Stock Analysis Report
 
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Pattern Energy Group Inc. (PEGI): Free Stock Analysis Report
 
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